Half-Year Report 2024 of the Swatch Group ($UHRN (-3,26%) / $UHR (-3,3%) ): An overview
Swatch Group published its half-year report for 2024 today, and I would like to summarize the most important information and an outlook for the second half of the year. The figures show both challenges and positive developments in the Group.
Key figures
- Net sales: CHF 3,445 million, a decrease of 14.3% compared to the previous year
- Operating profit: CHF 204 million, significantly lower than the CHF 686 million in the previous year.
- Net profit: CHF 147 million, a decrease of 70.5% compared to CHF 498 million in the previous year.
- Equity: CHF 12.2 billion, almost unchanged compared to CHF 12.3 billion in December 2023
Causes and developments
- Decline in demand in China: A major reason for the decline in sales was the sharp drop in demand for luxury goods in China, including Hong Kong SAR and Macau SAR. Interestingly, the Swatch brand was able to increase its sales in China by 10%, bucking the negative trend.
- Regional differences: While stable sales were achieved in Europe, there were uncertainties due to geopolitical conflicts. Record sales were achieved in the USA and Japan, with remarkable growth of over 30% in Japan.
- Production: The production area recorded a strongly negative operating result due to the deliberate maintenance of all production capacities, despite declining orders.
Outlook for the second half of 2024
Swatch Group expects the market in China to remain challenging, but sees great potential in the lower price segments. Further strong growth is expected in the USA and Japan, supported by investments in its own retail network. The outlook in Europe is also promising. Omega's role as the official timepiece at the Olympic Games in Paris, which will give the brand a global media presence, is highlighted as particularly positive.
The cost-cutting program introduced at the beginning of the year is showing initial success and will have further positive effects in the second half of the year. Overall, the Group expects the situation to improve significantly in the second half of the year.
What's next?
The Swatch Group is facing challenges, particularly in the Chinese market, but is also seeing positive developments in other regions. The Swatch brand and the investments in the retail network are bright spots. The coming months will be crucial to see how effective the measures introduced are and whether the positive development can be continued.
Hope helps!
Happy Investing
GG
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